Obama v Romney – is it time for green businesses to start worrying?

James S Murray
@James_BG
23 August 2012

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The race for the White House is also a race for the future of the green economy

The summer silly season is slowly drawing an end, to be replaced by the four yearly global media feeding frenzy that is the biggest political story since 2008: that's right folks, it's US presidential election time again.

As is always the case with US elections, the run-off between President Barack Obama and presumptive Republican nominee Mitt Romney will prove both globally and historically significant. This is true on a whole host of fronts, from foreign policy to tax plans and womens' rights to healthcare – and the differences between the two candidates are as apparent as anywhere in their stance on energy and environmental issues.

Obama has undoubtedly disappointed many of his supporters when it comes to the green agenda. The US role at international climate change negotiations has proven only fractionally more constructive than it was under President Bush, and the "teachable moment" presented by the BP oil spill was largely squandered as Obama failed to convincingly make the case for a surge in clean energy investment.

Even taking into account the constant obstructionism of the Republican-controlled House of Representatives, many environmentalists remain disappointed at the pace of progress on emissions legislation and the President's failure to categorically rule out the Keystone XL tar sands pipeline. Meanwhile, the deafening silence on climate change, even as the US has been crippled by a once-in-a-generation drought, has presented a stark contrast with Obama's pre-election commitment to tackle the issue head-on.

And yet, there is only one candidate in this election that green businesses and environmentalists will be supporting.

Despite the many flaws, throughout his administration Obama has overseen the consistent double-digit expansion of renewable energy capacity in the US, driven by a boom in wind and solar farms enabled in large part by his stimulus policies. He has had to fight Congress every step of the way, but he has also empowered the Environmental Protection Agency (EPA) to use the Clean Air Act to deliver new rules on greenhouse gas emissions from power plants and introduced the most demanding vehicle emissions standards in US history.

The commitment to an "all of the above" energy policy that would provide a central role for oil, gas, and coal for decades to come frustrates green NGOs and clean tech firms, but the approach allows plenty of space for increased investment in green energy and is accompanied by vocal calls for an end to fossil fuel tax breaks and subsidies.

Since the start of the year, the Obama administration has realised environmental and energy policy represents a wedge issue where a (small) majority of voters are on the side of the Democrats. As such the past few months have seen the President repeatedly make the case that his approach will create green jobs, improve US energy security, and tackle environmental problems such as climate change - it is a position the Democrats will seek to hammer home in the run up to November.

The contrast with Romney is stark, and today it got a whole lot starker.

Four years ago, Obama ran against a Republican candidate in John McCain who defied a large chunk of his own party to acknowledge that manmade climate change is an issue that needs addressing and set out some modest plans for curbing emissions. As you would expect from a GOP candidate, he offered greater support to the oil and gas industry than Obama promised, but he also made the case for a diversified energy mix and even sponsored emissions legislation.

Romney, in contrast, has flip-flopped on climate change and clean energy as he has done on so many issues, eventually coming down on the side of genuine climate scepticism and all out support for increased fossil fuel exploration.

Last year, he started out telling voters that "the world's getting warmer" and "I believe that humans contribute", adding that "I think it's important for us to reduce our emissions of pollutants and greenhouse gases" – a stance that fitted with the various low carbon policies and clean tech funding he oversaw as Governor of Massachusetts. But then the race to become the GOP candidate took a distinctly right-ward shift, resulting in Romney's widely-quoted suggestion last autumn that, "my view is that we don't know what's causing climate change on this planet – and the idea of spending trillions and trillions of dollars to try to reduce CO2 emissions is not the right course for us".

Since then his position has not been modified and the campaign has ducked any questions it has faced on climate policy, a former fossil fuel industry lobbyist with a dubious track record of smearing climate scientists has been appointed as one of Romney's lead spokeswomen, and in Paul Ryan a vice presidential candidate has been selected who has accused scientists of "intentionally misleading the public on the issue of climate change" and has voted against pretty much any and all environmental regulations that have crossed his desk.

Today, this all-out opposition to environmental regulation and climate change action has been codified with the release of Romney's heavily trailed energy strategy. It reiterates Romney's support for oil and gas industry tax breaks, hands states the freedom to open up vast areas of land for oil and gas exploration and drilling, proposes the immediate approval of the Keystone XL tar sands pipeline, promises light-touch regulation for the shale gas industry, and vows to stop the EPA tackling carbon emissions through the Clean Air Act. Unsurprisingly, there is no place for the kind of innovative emissions pricing mechanism that McCain flirted with, or the comprehensive low carbon energy support programmes Obama favours.

It also features a blistering assault on the Obama administration's environmental policies that is worth quoting at length:

"The first three years of the Obama administration have witnessed energy and environmental policies that have stifled the domestic energy sector. In thrall to the environmentalist lobby and its dogmas, the President and the regulatory bodies under his control have taken measures to limit energy exploration and restrict development in ways that sap economic performance, curtail growth, and kill jobs...

"As the Obama administration wages war against oil and coal, it has been spending billions of dollars on alternative energy forms and touting its creation of 'green' jobs. But it seems to be operating more on faith than on fact-based economic calculation. The 'green' technologies are typically far too expensive to compete in the marketplace, and studies have shown that for every 'green' job created there are actually more jobs destroyed. Unsurprisingly, this costly government investment has failed to create an economic boom."

It is not hyperbole to suggest that a Romney victory, coupled with Republican victories in the Senate and the House, would result in the evisceration of America's environmental protection and clean technology policies.

There is a good chance we would see a near complete withdrawal from international climate change negotiations, the rolling back of a raft of EPA rules designed to protect the environment from everything from Mercury pollution to greenhouse gas emissions, the end of countless clean energy support programmes, a surge in fossil fuel investment, and perhaps worst of all a Presidential and Congressional endorsement of scientifically illiterate climate scepticism.

The question green executives, and not just those in the US, will be asking is what does this all mean for the green economic outlook? The answer is pretty bleak.

According to the American Wind Energy Association (AWEA), projects are already being delayed and jobs are being lost over the uncertainty about whether the wind farm developer Production Tax Credit (PTC) will be extended past the end of this year – expect similar complaints from other clean tech sectors as the election nears. More broadly progressive business leaders will be concerned that after four years developing investment plans based on the Obama administration's environmental policy landscape, initiatives that were starting to deliver results could now be axed.

In the long term, most elections are largely irrelevant to the march of the green economy. The benefits associated with clean technologies – reduced greenhouse gas emissions, lower energy bills, enhanced energy security, and lower air pollution – combined with the rapidly falling cost of renewable energy means the widespread adoption of cleaner technologies should continue regardless of the political backdrop. US auto giants are not about to stop investing in electric vehicles because Romney hates them, while business leaders will continue to invest in energy efficiency measures because it makes sense to the bottom line. Moreover, as the cost of renewable energy falls, Romney's antipathy to the sector is simply a recipe to encourage US companies to import Chinese solar panels, which within a few short years will be able to compete with coal on the cost of energy.

But that is the long term. In the short to medium-term a President Romney would do untold damage to both US domestic efforts to build a prospering clean tech sector and international efforts to tackle climate change. He stands at the head of a party that is now so wedded to fossil fuels and global warming denial that even if clean energy becomes cheaper than coal, it will continue to cling to the very fuels that are driving the kind of climate change that is already having a dangerous impact on the American heartland.

With Obama's poll lead looking extremely fragile and the Republicans embarked on a staggeringly visible campaign to disenfranchise Democrat voters, green business leaders around the world should be deeply concerned at the looming threat to the entire concept of a low carbon and sustainable economy. That threat is Mitt Romney, and despite the numerous gaffes and staggering inconsistency, there is nothing silly about him.